Blog

You may have heard all the predictions that there is a
recession on the way and it could make you nervous and you might worry if you
will struggle with money or have to take out a loan. It is wise to firstly
remember that predictions are not always right and that even if we do have a
recession, things may not be that bad for you. It is good to think about what a
recession actually is and what impact it might have on you and how you can
protect against this.

What is a recession?

A recession is a term which describes the case when an economy has not grown for two consecutive quarters of a year. It is something that is measured by the government and can come about for a selection of reasons. It could be a financial crisis, a trade shock or general downturn which will cause spending to decrease. It is the decrease in spending which will cause the economy to shrink.

What impact might it have?

The government might choose to put in some measures to try stop the recession or to prevent it form getting worse including reducing taxes, increasing government spending or increasing the money supply. These could have impacts on households by making them a bit better off. However, households can be hit differently. A decline in business growth could lead to companies having to be forced to reduce their workforces and so some households could be hit by redundancy. It could also mean that salaries will not go up and so real wealth could decrease if prices continue to rise. Knock on effects could also lead to other things happening but it can be tricky to predict. It will depend on how long the recession lasts and whether just one or multiple countries are affected by it.

How can I protect against it?

Therefore, the things that you will need to protect against are redundancy and reduce wage growth. To protect against redundancy it can be wise to make sure that you are doing your job well, that you ensure your role is needed by making yourself really useful and that you are keen and enthusiastic. Although it is the role that is made redundant not the person, it will not hurt to make sure that you are always punctual and helpful as well, just to keep giving a good impression. Of course, there will still be a chance that you will be made redundant. This means that you need to think about what you could do to help this situation. Make sure that your CV is up to date so that it is ready to send out should you need to. Make sure that your skills are up to date as well. Although you may not want to pay out for formal training, you can still teach yourself a lot of things, from free online courses or books and this could be useful too.

Financially, you will want to protect yourself as well.
Making sure that you maximise your savings can be very handy as it means that
you will have some money to fall back on should you find that things are
getting too expensive or you lose your job. It will also be helpful in getting
you into good spending habits. This is because you will need to spend less in
order to save some money. If you can get used to spending less, then if you
really need to then you will already be used to it. It can be well worth
comparing prices too and making sure you are not spending more than you need to.
Again, this will help you form a useful habit, but it will also allow you to
save more money.

If you think that you are likely to be made redundant,
perhaps because the company that you work for are already struggling or the
sector that you work in is, then perhaps you should start to look for another
job and perhaps even find a new job right now. It is wise to be aware of what
opportunities are available even if you do not actually change jobs right away.
This will allow you to make sure that you have the right skills for the jobs
that you want.

It can also be useful to familiarise yourself with websites
where you can compare prices. You can compare lots of thinks from loans and
insurance to food and toiletries. Using these will help you to make sure that
you are buying the products that you need form the cheapest places. It should
help you to be able to keep the costs of your spending down, which will help
you save more in the short term and if you do get made redundant you will not
be spending so much then, when you have less money available to do so.

There is a lot of pressure these days to be more caring
towards the environment and you may really want to try your best as well. There
are a lot of things we can do that seem really expensive though such as
changing our car to an electric one or to replace our boiler with one that does
not run on gas. This can make it seem like it will be impossible to make a
significant change without spending a fortune. However, making small changes
can make a difference and they can all add up. There might also be some things
that you can do which will even save you money.

Reuse

The first main thing we can try is to reuse things more. We often throw things away without thinking about whether tis is the best thing to do with them. It is good to think about whether they can be reused. Everything from wrapping paper and envelopes to clothing and newspapers could be reused. Of course, they might be recycled and so you may think this will be enough, but if we can reuse them before recycling we can save money and the environment. Carefully remove the tape from wrapping paper and you might be able to use it again. Use paper as scrap instead of using notebooks, so the backs and insides of envelopes, back of wrongly printed paper etc. It can be written on and then recycled. Newspapers can be used to wrap things in when posting or to stuff in boxes around items to protect them and some people even use the pages instead of wrapping paper. Clothing may be able to be darned, repurposed or given to charity shops to be resold.

Recycle

It is important to make sure that we are recycling properly. Make sure that you are aware of exactly what items are collected kerbside and then whether there are other local facilities for recycling other things. It is worth knowing that even things like empty pens can be recycled you just have to find out where. There are websites where you will be able to find out details of where you can recycle things like this locally.

Buy second hand

If you buy things second hand then you are not buying something that has been made new. This means that you are prolonging the life of an item which is good. Often it will be cheaper than buying a new item as well. You may have to search harder for it, but if you buy online then you might be able to search more easily by entering the details of what you want and it will search for you. In a charity or second hand shop you will have to search yourself through the items to find one that is suitable.

Never waste things

These days we do tend to waste a lot of things. Whether it is food that has gone off before we ate it, the last few pages of a notebook so we can start the next one or a shower gel that we just do not like the smell of. If we can get out of the habit of wasting things like this we will save money and we will be being greener. Food is probably one of the biggest things we waste so get into the habit of checking dates and using things up or putting them in the freezer so that they can be used up when you are ready to.

Cut down on electric, gas and water use

We could probably all cut down on these a bit. Turning our heating down or having it on less often could be a good start. Having showers instead of baths and turning off appliances when we are not using them will also help. Even using a more economical setting on our washing machine or using an clothes airer instead of a drier will make a big difference. Thinking about where we are using these things and how we can make a difference could be really useful.

Use the car less

We often rely on using the car a lot even if we are just going short distances. It is wise to think about whether we can walk or cycle instead as that will save us money and help the environment as well as having the bonus of helping us to get fitter. Using public transport can be more expensive but there are ways to save money by buyer tickets in advance, travel cards or multiple journey tickets and so it can be worth looking into these and seeing if you can save enough money that way to make it worthwhile.

Eat less meat, fish and dairy

Cutting down on our meat, fish and dairy is something that has been flagged up as a way to be greener. Although this might seem like a campaign from vegans to get everyone to change, it is often said that you just need to consider cutting down a bit and you do not need to go completely vegan. Often, we do eat more meat and dairy than is healthy for us anyway and so cutting down our portion sizes could help us to be healthier and lose some weight. We will also find that it is cheaper to have a smaller portion as well.